As Canada’s VC Industry Erodes, A Real Estate Firm Jumps In

The venture investing scene in Canada has been fairly bleak in recent years, prompting Canada’s Venture Capital and Private Equity Association to recently declare that 2009 saw the lowest level of investment activity in the past 13 years.

While limited partners have increasingly moved their investments away from private equity and into other asset classes, the tide could be beginning to shift in Canada, as other players move into areas being left behind by traditional LPs. Canadian real-estate firm Mantella Corp., for example, has tapped two Toronto early-stage investors to spread a new, C$20 million ($19.3 million) venture fund to more than a dozen fledgling technology companies.

“This is a very savvy real-estate company,” said Robin Axin, a co-founder of Toronto incubator BaseCamp Labs. “Their CEO has seen a real shift, as pension funds and REITs enter his space and change the game. He’s responding by diversifying, and moving into areas that are getting abandoned.”